Entrepreneurs in New Jersey and Around the Country Push Back Against Sex Discrimination, Sexual Harassment

Legal News GavelAnti-discrimination laws in New Jersey, at the federal level, and in other states around the country prohibit discrimination in employment based on numerous factors, including sex. These prohibitions on sex discrimination include sexual harassment. The past few months have seen a possibly unprecedented series of allegations and revelations about sexual harassment in the entertainment industry and in Washington, D.C. Even before that, however, people involved in technology startups in California and elsewhere were coming forward with allegations of sex discrimination and sexual harassment. Many of these involved female entrepreneurs and male investors. These cases often present a legal quandary for people claiming sexual harassment, since the types of employer-employee relationships covered by anti-discrimination statutes are not always present in the entrepreneurship model. New Jersey is also home to many startup businesses, making this an important issue for New Jersey sexual harassment claimants as well.

The New Jersey Law Against Discrimination (NJLAD) and Title VII of the Civil Rights Act of 1964 prohibit sexual harassment as a form of sex discrimination. Sexual harassment consists of a range of unwelcome behaviors of a sexual nature, including remarks, jokes, overtures or advances, direct requests for sexual contact, and unwanted touching or assault. This type of conduct constitutes unlawful sex discrimination when an employer makes sexual activity a condition of employment, or when the offensive conduct creates a hostile working environment for an employee. Employers are often held vicariously liable for sexual harassment by a supervisor, manager, executive, or director against someone who works in a subordinate position. If the alleged harasser is a co-worker, the employer may be liable if they are aware of the harassment but fail to take reasonable measures to address it.

Startup companies are, broadly speaking, businesses in the very early stages of development that offer some sort of novel product or service. No distinct definition of “startup” exists, but perhaps a key feature of a startup is that its operating expenses exceed its income—if any income exists—and its business model is at least partly unproven. Many startups therefore rely on investors to fund initial development and growth. Venture capitalists (VCs) are in the business of investing in startups, providing money for the company and, often, mentoring for the entrepreneurs. Many of the recent allegations of sex discrimination and sexual harassment originate in interactions between entrepreneurs and VCs.

In many situations in which sexual harassment by a VC is alleged to have occurred, legal recourse is limited under laws like the NJLAD because the VC firm is not the entrepreneur’s employer. A potential exception occurs once funding has occurred. At this point, a VC firm will often place one or more of its own people onto the startup’s board of directors, while the entrepreneurs take on executive roles. This creates an employment relationship, but not until the startup and the VC firm are rather far along in their business relationship. A bill currently pending in the California Legislature would address this issue by adding “investors” to the list of people who could be held liable for discriminatory practices. No such law exists in New Jersey yet, but entrepreneurs around the country are finding ways to push back, including internal company policies and VC blacklists.

If you need to speak to a sexual harassment lawyer about a dispute in New Jersey or New York, contact the Resnick Law Group today online, at 973-781-1204, or at (646) 867-7997.

More Blog Posts:

Lawsuit Claims Sexual Harassment, Pregnancy Discrimination by New Jersey Hospital, The New Jersey Employment Law Firm Blog, December 11, 2015

Pop Singer Sues Producer for Sexual Harassment, Other Claims; Producer Counter-Sues for Extortion, The New Jersey Employment Law Firm Blog, November 25, 2015

Discrimination, Harassment Lawsuit Targets the Tech Industry, The New Jersey Employment Law Firm Blog, June 10, 2015

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